Jobs to go as power stations, mine close, railway suspended

More than 400 jobs will be lost with the closure of two power stations and the Leigh Creek coal mine in South Australia.

Alinta Energy has revealed it will close its Port Augusta power stations and the Leigh Creek mine as early as March next year.

The company says it plans to close the operations by March 2018, but they could be shut down by an earlier date as they become increasingly uneconomic.

Workers were told of Alinta's plans on Thursday and will receive their full entitlements, worth about $75 million.

"There are approximately 440 employees that will be affected by this difficult decision," Alinta chief executive Jeff Dimery said.

"Their welfare and that of their families is our highest priority at this time."

Mr Dimery said the decision to close the SA operations came after a detailed strategic review that concluded there was no chance of a return to profitability.

"Throughout the four and half years we have been running the business we have investigated all possibilities to find a viable economic solution for its continued operation," he said.

"The decline in demand for energy, as households have become more efficient and the number of industrial customers has declined, combined with policy settings designed to support significant growth in renewable energy generation, have together had the effect of causing a significant oversupply of power available to South Australia."

A group campaigning for the Port Augusta power stations to be replaced with a solar-thermal facility says Alinta's decision to "cut and run" has taken the community by surprise.

Spokesman Dan Spencer says the state government must step up and provide funding for a solar thermal power station.